Advocates:
['', '', 'Praxis Legal', '', '', 'LEGASIS PARTNERS']

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S 1418-2003.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

SUIT NO. 1418 OF 2003

M/s.Ajay Deep Construction Pvt.Ltd.

...Plaintiff

vs.

Maharashtra State Police Housing & Welfare

Corporation Ltd.

...Defendants

Mr.Devrat Singh with Mr.Arthav Sanghvi i/b. Praxis Legal for Plaintiff.

Mr.Narayan Sahu with Ms.Khursheed Vajifdar and Ms.Rahat Kalpatri i/b.

Legasis Partners for Defendants.

CORAM : S.C. GUPTE, J.

DATE : 28 JUNE 2021

JUDGMENT :

The Plaintiff has filed the present suit for recovery of

Rs.1,09,78,024 together with pendente lite and post decree interest. The

claim arises out of a construction contract.

2

The Defendants had invited tenders for construction of 650

quarters for policemen of SRPF Group IX at Amravati, with infrastructural

amenities. The Plaintiff was the successful bidder. The construction

contract was evidenced by work order dated 7 November 1996 and a

formal contract agreement of the same date, i.e. 7 November 1996. Under

the contract, the date of commencement of work was 7 November 1996,

whereas the time for completion of the contract work was 36 months.

Based on the revised quantum of scope of work, the original contract value

of Rs.15,29,54,891 was revised by the Defendants to Rs.21,50,35,706. The

original stipulated date of completion was extended upto 19 December

1999. These facts are not in dispute. It is also not in dispute that the

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S 1418-2003.doc

Plaintiff completed the entire work within the stipulated date of

completion. There is no dispute as to the quality of the work carried out by

the Plaintiff. The bills submitted by the Plaintiff from time to time, both as

running bills and as final bill, were recommended for payment by the

project management consultant, whose job was to oversee the work. The

grievance of the Plaintiff pertains to three individual items of work for

which payment was not made by the Defendants and a claim for excess

amount recovered by the Defendants from mobilisation advance given by

the Defendants to the Plaintiff and diverse claims of interest, i.e. interest on

delayed payments on three items, namely, (i) running account bills, which

were paid by the Defendants with delay, (ii) Escalation bills (labour,

material, POL) paid with delay, and (iii) Escalation bills (star rate) paid

with delay, and interest till filing of the suit on unpaid amounts.

3

The claims are contested by the Defendants on merits. So far

as the unpaid items of work are concerned, it is the case of the Defendants

that the amounts were not due or payable having regard to the terms of the

contract. So far as the claim for amount of interest recovered from

mobilisation advance is concerned, it is contested by the Defendants on

merits on the basis of the relevant stipulation in the construction contract.

As regards interest for delayed payments, it is the case of the Defendants

that there was no stipulated date of payment save and except for the final

bill; the period mentioned in the contract in respect of payment of running

account bills was an approximate period, requiring simply payment within

the indicated period, if possible.

4

The following issues were framed by this court by its order

dated 10 September 2014:

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(1) Whether the Plaintiffs prove that they have carried out extra

work under the contract and they were entitled to be paid for

the extra work?

(2) If the answer to issue no.1 is in the affirmative, then at what

rate is the Plaintiffs entitled to be paid?

(3) Whether the Plaintiffs prove that the Defendants delayed in

paying the running account bills and therefore, the Plaintiffs

are entitled to interest on those delayed bills?

(4) If the answer to issue no.3 is in the affirmative, then at what

rate interest is the Plaintiffs entitled to be paid?

(5) Whether the Plaintiffs prove that the Defendants have

deducted excess interest on the mobilisation advance and the

amount of excess